Stronger growth bodes well for a lower fiscal deficit, while the government could surprise many with a tighter-than-expected February budget, says note.

Credit Suisse expects the 10-year yield to fall to as low as 7.5 percent by mid-2013 as the bank sticks to its view the RBI will cut interest rates by 125 basis points (bps) by 2013/14, with 50 bps of it coming on Jan 29.

Though not "structurally positive" on the currency, the investment bank is looking at a brief rally with the rupee at 53.5/dollar in March before dropping back to 56.5/dollar by end-2013.